A group of small banks just scored on the Verizon-Yahoo deal

Jon Marino
Updated
A group of small banks just scored on the Verizon-Yahoo deal

When the year's most hotly anticipated tech deal went down, Wall Street's biggest banks got elbowed aside by upstart competitors.

There were more boutique banks on the Yahoo-Verizon deal , announced Monday morning, than institutional Wall Street firms — the latest reminder that small, dedicated and focused M&A teams are increasingly disrupting institutions that are often their former employers.

LionTree Advisors, Allen & Co., Bank of America Merrill Lynch (NYSE: BAC) and Guggenheim Securities advised Verizon (NYSE: VZ) on its $4.83 billion purchase of Yahoo (NASDAQ: YHOO); Goldman Sachs (NYSE: GS), JPMorgan (NYSE: JPM) and PJT Partners (NYSE: PJT) worked on the deal for Marissa Mayer and Yahoo.

"The number of banks on the deal was relatively large," said Jeffrey Nassof, director at mergers and acquisitions consulting firm Freeman & Co. "The obvious trend here is toward boutiques."

And just as the number of banks on the deal was large, so was the payout. There is about $80 million to $90 million to be divided among the banks on the deal, Nassof said.

Yahoo hasn't exactly been known for taking the traditional route toward M&A in the past, and Verizon has previously leaned on Guggenheim bankers on large transactions, so the outcome Monday morning may not be viewed as a surprise in some corners of Wall Street. Both LionTree and Guggenheim represented Verizon on its acquisition of AOL last year, and in that deal, Allen & Co. represented the seller.

Big banks dominated the M&A scene until after the global financial crisis. After that, boutiques' portion of M&A revenue rose, from single-digit territory to 17 percent at the midway point of this year.

For banks that until recently had a stranglehold on M&A to lose out on tens of millions of dollars stings on a number of levels.

Wall Street has cut so many jobs, that it's now forced to cut pay in order to make numbers , and at a time when boutiques' share of deal revenue has increased from the prior year, it seems likely that their upper hand is only growing stronger .

— Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.



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